I never understood the exact mechanisms behind this. I’m in Thailand right now. I have a savings account with euros at bank A. I want to withdraw Thai Baht from an atm of bank B. I get the option to withdraw with or without conversion. With conversion is more expensive, so I’m advised to go for without conversion.
Since I don’t have thai baht in my savings, I’m guessing at some point my euros always needs to be converted to baht. Who pays for the conversion in which cases? Why would the ‘with conversion’ option be more expensive? Why would I ever even pick the ‘with conversion’ option?
In: Economics
Whoever pays the conversion is you (as always) so the question becomes Who do you pay?
The bank is always more/most expensive for many reasons but also you’re paying for the extra convenience of doing all that from your screen etc.
Cheaper options would be doing the conversion in-country so at the airport or at the hotel and stuff like that. Popular tourist areas typically also has cash machines and exchange booths. There’s always street corner traders (black market dealers) as a last resort of course.
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